CX - Since proceedings were not happily conducted by CCE, Kanpur, High Court directs that adjudication proceedings be transferred to CCE, Lucknow: High Court
By TIOL News Service
ALLAHABAD, JAN 14, 2016: AN order in original was passed on 31.3.2011 by Commissioner, Customs, Central Excise & Service Tax, 117/7, Sarvodaya Nagar, Kanpur , whereby duties and penalties were imposed upon the Company and its Directors and other persons. This order was challenged and the Tribunal by its order dated 25.2.2013 remitted the matter again to the Commissioner to pass a fresh order.
The operative portion of this order reads -
"6. As we have already observed that there are various decisions laying down that a joint demand and joint penalty cannot be confirmed against the appellants against two persons, we deem it fit to set aside the impugned order and remand the matter to the adjudicating authority for fresh decision for fixing the liability of each and every individual separately. We make it clear that we have not gone to the merits of the case and the Revenue as well as assessee are entitled to raise all the legal issues including the appreciation of evidence on record, including the appellants request for cross examination afresh in the denovo proceedings."
Be that as it may, pursuant to the order of the Tribunal no further proceedings were initiated but an exparte order dated 28.8.2015 was passed by the Commissioner imposing fresh duties and penalties.
In paragraph no.107 of the impugned order dated 28.8.2015,the adjudicating authority mentionedthat an opportunity was given to the petitioners at the time when the first order in original was passed and, therefore, no fresh notice was required to be given. In para 109, it is also stated that the crossexamination is not a part of natural justice but only a procedure and, therefore, cross-examination of a witness was not required to be given.
The petitioner is before the High Court contending that the order in original was passed ex parte without issuing notice and without giving an opportunity of hearing. They seek quashing of the order. In spite of the fact that an alternative remedy is available, the High Court observed that in the facts of the case the said petition can be entertained and accordingly directed the Commissioner to appear before the Court and file a personal affidavit intimating the Court as to whether any notice or opportunity of hearing was provided to the petitioners pursuant to the order of the Tribunal dated 25.2.2013.
The Commissioner appeared before the High Court and filed an affidavit admitting that the impugned order was passed without serving any notice.
The adjudicating authority justified the action by making the following submission in her affidavit -
"3. That any shortfall in passing of the impugned order dated 28.08.2015 has been, due to inadvertence in interpreting the import of the order dated 25.02.2013 of the Tribunal, inasmuch as, the order passed by the CESTAT has been in two portions (1) Fresh decision for fixing liability severally; (2) "the assessees are entitled to raise all the legal issues including the appreciation of evidence on record, including the appellants request for crossexamination afresh in the de-novo proceeding."
In view of the above the deponent under a patent belief that in so far as the legal issues were concerned the party was under an obligation to raise the same before the adjudicating authority but since the same was not done for a considerable period of time i.e. Almost two and a half years, therefore the deponent on a conclusion that the party had nothing to put forward in their defence, hence proceeded with the adjudication without service of any notice, since it was incumbent upon the party to have approached the adjudicating authority for decision afresh in their matter which was not done so by them."
The petitioner also brought to the notice of the High Court that prosecution proceedings were launched based on half truths and incomplete facts and that after the complaint was filed on 24.2.2014, the petitioners filed an application for discharge and on the date fixed for consideration of the said application, the impugned order in original dated 28.8.2015 was filed in the court concerned without even serving the same upon the petitioner; that this was done deliberately in order to scuttle the proceedings before the Criminal Court; that the impugned order imposes duties and penalty upon the Managing Director of the Company ShriMukeshAgarwal who had already died, which fact was known to the Commissioner, inspite of which, the Commissioner chose to pass an ex parte order against a dead person; that the impugned ex parte order was passed deliberately to harass the petitioner for vested reasons; that the conduct of the Commissioner indicated that the petitioner will not get justice from the Commissioner and, therefore, the petitioner submitted that while setting aside the ex parte order a direction should be issued for transfer of the case to another competent officer.
The Counsel for the Revenue had no objection to this proposal made by the petitioner.
The High Court while noting that the affidavit filed by the Commissioner indicated the mindset of the officer of lack of knowledge on the aspect of principles of natural justice as envisaged under Article 14 of the Constitution of India observed thus -
+ We get an uncanny feeling that there was lack of fairness on the part of the Commissioner in dealing with the matter. We are of the firm view that this small whiff of unfairness is sufficient for us to transfer the case so that there is fairness and principles of natural justice is followed. We, consequently have no hesitation in holding that the impugned order was passed exparte without issuing any notice or without affording any opportunity of hearing to the petitioner and, consequently the impugned order is set aside.
The writ petition was allowed and the High Court transferred the adjudication proceedings in question to the Commissioner, Customs, Central Excise & Service Tax, Lucknow based on its conclusion that the proceedings were not happily conducted by the Commissioner, Customs, Central Excise & Service Tax, Kanpur .
In passing: Please also see 2007-TIOL-177-HC-ALL-IT.
(See 2016-TIOL-87-HC-ALL-CX)
